- Terraform Labs opens a claims portal for LUNA losses, with the April 30 submission deadline.
- Galaxy Digital settles for $200M with NY AG over undisclosed LUNA holdings and sales.
- Terraform Labs will review crypto claims, excluding LUNA 2.0 and low liquidity assets.
Taking an innovative move, Terraform Labs proposed to launch a Crypto Loss Claims Portal on March 31. The portal will allow affected creditors to submit their claims from the Terra ecosystem failures. Claims submissions must be submitted through the Portal before April 30, 2025, at 11:59 p.m. ET. The portal launch coincides with the company’s ongoing recovery process as it seeks to restore lost funds to victims harmed by the TerraUSD (UST) and LUNA collapse.
Eligibility Criteria for Claims Submission
The claims process demands that creditors register with the portal and submit necessary documents, including wallets or read-only API keys, to prove their asset ownership. Terraform Labs teams up with Kroll Restructuring Administration to help customers with their claims process.
However, not all cryptocurrencies associated with the collapse will be eligible for claims. Specifically, LUNA 2.0 tokens on Terra 2.0 and assets with on-chain liquidity under $100 will be excluded from the claims process.
The provision of manual evidence leads to longer delays, but creditors who share read-only API keys tend to experience faster claim processing. Payment claims will be reviewed by the Wind Down Trust. They will review payment claims before notifying creditors of the outcome within 90 days.
Galaxy Digital Settles with New York Attorney General
An additional settlement agreement between the New York Attorney General’s Office and Galaxy Digital Holdings reached $200 million due to allegations of LUNA token promotions. The investigation found that Galaxy Digital did not report its LUNA token ownership or sales activity, thus violating state regulations enforced by the Martin Act and Administrative Law. Galaxy Digital agreed to pay out $200 million over three years, beginning with an immediate payment as part of the agreement, despite never acknowledging the allegations in court.
The settlement reminds us of the regulatory scrutiny facing companies involved in promoting and selling volatile cryptocurrencies. According to the recent actions taken by the New York Attorney General, attention to investor protection and improved transparency enhances focus in the cryptocurrency market.
Related: Wyoming To Launch First US State-Backed Stablecoin in July
Terraform Labs Faces Financial Fallout
The Singapore-based Terraform Labs company continues to face severe challenges following the collapse of TerraUSD and LUNA stablecoin projects. In May 2022, TerraUSD lost its peg to the U.S. dollar, which caused a market collapse that wiped out 40 billion dollars of its value. The company’s attempt to stabilize TerraUSD through massive LUNA minting caused a devastating price plunge that decreased LUNA from more than $80 to fractions of a cent. This instability contributed to Terraform Labs filing for Chapter 11 bankruptcy in January 2024.
In September 2024, a U.S. bankruptcy court approved Terraform Labs’ plan to wind down its operations after a $4.47 billion settlement with the U.S. Securities and Exchange Commission (SEC). According to the SEC, the company and its co-founder, Do Kwon, deceived investors about the safety of TerraUSD and ignored important operational details. Following his arrest in Montenegro, police handed Do Kwon to US authorities, who charged him with money laundering and fraud in 2024.
